CBDT Notifies FAST-DS Rules 2026 for One-Time Disclosure of Undisclosed Foreign Assets

The Central Board of Direct Taxes (CBDT) has notified the Foreign Assets of Small Taxpayers, Disclosure Scheme (FAST-DS) Rules, 2026 through Notification No. 114/2026 dated 14 August 2026. The scheme, which came into force on 16 August 2026, provides a one-time, time-bound window for eligible taxpayers to voluntarily disclose specified foreign assets and foreign income that were not previously reported in their income-tax returns. The disclosure window will remain open until 31 December 2026, after which no further declarations will be accepted. The scheme is codified under Sections 130 to 144 of the Finance Act, 2026, and operates within the framework of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Taxpayers managing FATCA and CRS reporting obligations should pay particular attention to this scheme.

Who Is the Scheme Designed For

The government has specifically identified several categories of persons who could benefit from the disclosure window. These include students who acquired foreign bank accounts or investments during education abroad and did not report them upon returning to India; young professionals and employees in the technology sector who received stock options (ESOPs) or equity awards from foreign parent companies and failed to disclose these in Schedule FA of their income-tax returns; and non-resident Indians (NRIs) who subsequently relocated to India and became resident taxpayers but did not declare foreign assets accumulated during their period of non-residency. The scheme is designed for smaller, often inadvertent, non-disclosures rather than large-scale tax evasion, which is why it is limited to specified value thresholds.

Two Categories of Disclosure

Category 1: Undisclosed Foreign Assets or Income up to Rs 1 Crore. This category covers foreign assets or foreign income that was never offered to tax in India. The aggregate value of assets or income eligible for declaration must not exceed Rs 1 crore. Taxpayers under this category are required to pay tax at 30% of the value of the undisclosed foreign asset or income, plus an additional amount equal to the tax payable. This effectively brings the total payment to 60% of the declared value. The tax and additional amount must be paid before the declaration is considered valid.

Category 2: Undeclared Foreign Assets up to Rs 5 Crore. This category covers foreign assets that were acquired from income that was already offered to tax in India, or when the taxpayer was a non-resident, but the assets were not disclosed in Schedule FA of the income-tax return. For such cases, foreign assets with an aggregate value of up to Rs 5 crore can be declared by paying a flat fee of Rs 1 lakh. This category is particularly relevant for returning NRIs and professionals who received foreign equity compensation but neglected the Schedule FA reporting requirement. Taxpayers dealing with permanent establishment risk under DTAAs may also find this window useful for regularising unreported foreign assets.

Immunity from Black Money Act Prosecution

Upon a valid disclosure and payment of the prescribed tax or fee, the taxpayer receives full statutory immunity from penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Notably, the immunity is automatic and granted by operation of law once the conditions are fulfilled; it is not discretionary. This is significant because the Black Money Act carries severe penalties: Section 3 imposes a flat 30% tax on undisclosed foreign income and assets, while Section 41 prescribes a penalty equal to three times the tax, which can effectively amount to 90% of the asset value. Additionally, non-disclosure can attract prosecution with imprisonment of up to ten years. The FAST-DS scheme offers an alternative to these consequences for eligible small taxpayers.

Exclusions and Conditions

The scheme is not a blanket amnesty. Several important exclusions apply. Declarations cannot be made in respect of income or assets representing proceeds of crime under the Prevention of Money Laundering Act, 2002. The scheme does not apply where assessment proceedings under the Black Money Act have already been completed in relation to the assets or income in question. A declaration becomes invalid if material particulars furnished by the taxpayer are found to be false. Additionally, taxpayers who have been the subject of a search or survey under the Income-tax Act, 1961, in relation to the foreign assets being declared may not be eligible. Persons planning to use this window should also ensure compliance with FEMA due diligence requirements and dividend repatriation norms where applicable.

How to File a Declaration

Declarations under the FAST-DS scheme must be filed electronically through the income-tax e-filing portal. The declarant must provide details of the foreign assets or income being disclosed, the period during which they were held or earned, the basis of valuation, and the computation of tax or fee payable. Payment of the tax or fee must accompany the declaration. The declaration must be filed on or before 31 December 2026. No extensions have been announced, and the CBDT has indicated that the deadline will not be extended. Taxpayers should plan their disclosures well in advance and may benefit from maintaining an organised compliance calendar to track the filing deadline.

Context and Policy Rationale

The FAST-DS scheme reflects the government's recognition that a significant portion of unreported foreign assets belong to smaller taxpayers who failed to disclose them due to inadvertence, lack of awareness, or changes in residential status rather than deliberate evasion. India's participation in the automatic exchange of financial information under the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) means that unreported foreign accounts are increasingly likely to be detected through data received from foreign jurisdictions. The revised FATCA and CRS guidance note underscores the enhanced information-sharing infrastructure that makes voluntary disclosure a prudent course of action for non-compliant taxpayers.

Key Takeaways

• CBDT Notification No. 114/2026 dated 14 August 2026 notifies the FAST-DS Rules, 2026, providing a one-time disclosure window for undisclosed foreign assets and income, open from 16 August 2026 to 31 December 2026.

• Category 1 covers undisclosed foreign assets or income up to Rs 1 crore, with an effective tax cost of 60% (30% tax plus an equal additional amount).

• Category 2 covers undeclared foreign assets up to Rs 5 crore (where income was already taxed or acquired during non-residency) for a flat fee of Rs 1 lakh.

• Valid declarations attract automatic immunity from penalty and prosecution under the Black Money Act, 2015, which otherwise imposes penalties of up to 90% of asset value and imprisonment of up to ten years.

• The scheme targets students, tech employees with foreign ESOPs, and returning NRIs who failed to disclose foreign assets due to inadvertence or lack of awareness.

• Declarations must be filed electronically by 31 December 2026, with no extensions announced, and exclusions apply for proceeds of crime, completed assessments, and false declarations.

Eligible taxpayers should act promptly given the fixed 31 December 2026 deadline, as the CBDT has not indicated any possibility of extending the disclosure window.